Studying the contribution from university scientist to inventions patented by Danish and Swedish dedicated bioteck firms (DBFs), we examine effects of the Law on University Patenting (LUP) implemented in Denmark in January 2000, transferring to the employer university rights to patents on inventions made by Danish university scientist alone or as participants in collaborative research with Industry.
Jel classes: I23, L65, O31, O34, O38

This paper deals with methodological issues of assessing the composition and level of
heterogeneity of firms’ intellectual assets. It develops an original metric - referred to as
the H-index - for measuring heterogeneity using data extracted from patent documents.
The main purpose is to improve the characterisation of research activities within firms
in the biotechnology sector. Although the H-index grew out of research on biotech
firms, the metric carries broader relevance for all patent-intensive industries. The
measurement and calculation of the H-index is illustrated using some empirical
examples from our preliminary study on Scandinavian biotech firms.

Although biotech start-ups fail or succeed based on their research few attempts have been made to examine if and how they strategize in this core of their activity. Popular views on Dedicated Biotech Firms (DBFs) see the inherent uncertainty of research as defying notions of strategizing, directing instead the attention to the quality of their science, or the roles of boards, management, and collaborative networks etc.
Using a unique comprehensive dataset on Danish and Swedish biotech start-ups in drug discovery this paper analyzes their research strategies. Adopting a Simonean point of departure we develop a contingency view on complex problem solving which structures the argument into three steps:
1) Characterising the problem architectures addressed by different types of DBFs;
2) Testing and confirming that DBFs form requisite research strategies, by which we refer to problem solving approaches developed as congruent responses to problem architectures;
3) Testing and confirming that financial valuation of firms is driven by achievements conforming to requisite research strategies. These strategies, in turn, require careful combination of multiple dimensions of research.
Findings demonstrate that Shonhoovens classical argument that “strategy matters” is valid not only for the larger high-tech firms covered by her study, but also for small research-based start-ups operating at the very well springs of knowledge where science directly interacts with technologies. Even though a lot more research is needed along these lines, these findings offer new implications for the understanding, management, and financing of these firms.

Although biotech start-ups fail or succeed based on their research few attempts have been made to examine if and how they strategize in this core of their activity. Popular views on Dedicated Biotech Firms (DBFs) see the inherent uncertainty of research as defying notions of strategizing, directing instead the attention to the quality of their science, or the roles of boards, management, and collaborative networks etc. Using a unique comprehensive dataset on Danish and Swedish biotech start-ups in drug discovery this paper analyzes their research strategies. Adopting a Simonean point of departure we develop a contingency view on complex problem solving which structures the argument into three steps:
1. Characterising the problem architectures addressed by different types of DBFs;
2. Testing and confirming that DBFs form requisite research strategies, by which we refer to problem solving approaches developed as congruent responses to
problem architectures;
3. Testing and confirming that financial valuation of firms is driven by achievements conforming to requisite research strategies. These strategies, in turn, require careful combination of multiple dimensions of research.
Findings demonstrate that Shonhoovens classical argument that "strategy matters” is valid not only for the larger high-tech firms covered by her study, but also for small research-based start-ups operating at the very well springs of knowledge where science directly interacts with technologies. Even though a lot more re-search is needed along 3 these lines, these findings offer new implications for the understanding, management, and financing of these firms.

Although biotech start-ups fail or succeed based on their research few attempts have been made to examine if and how they strategize in this core of their activity. Popular views on Dedicated Biotech Firms (DBFs) see the inherent uncertainty of research as defying notions of strategizing, directing instead the attention to the quality of their science, or the roles of boards, management, and collaborative networks etc. Using a unique comprehensive dataset on Danish and Swedish biotech start-ups in drug discovery this paper analyzes their research strategies. Adopting a Simonean point of departure we develop a contingency view on complex problem solving which structures the argument into three steps:
1) Characterising the problem architectures addressed by different types of DBFs;
2) Testing and confirming that DBFs form requisite research strategies, by which we refer to problem solving approaches developed as congruent responses to problem architectures;
3) Testing and confirming that financial valuation of firms is driven by achievements conforming to requisite research strategies. These strategies, in turn, require careful combination of multiple dimensions of research.
Findings demonstrate that Shonhoovens classical argument that "strategy matters" is valid not only for the larger high-tech firms covered by her study, but also for small research-based start-ups operating at the very well springs of knowledge where science directly interacts with technologies. Even though a lot more research is needed along these lines, these findings offer new implications for the understanding, management, and financing of these firms.
JEL Codes: L25, L65, O32

This report studies employment effects associated with the adoption of modern biotechnology in Danish industry. In this context we also examine industry structure, patterns of job creation, key outputs such as patents and the pipeline of projects in clinical trials. To see the development of Danish biotech firms in a relevant context we compare a Danish segment of biotech firms with a matching Swedish segment.
From an overall assessment modern biotechnology, despite the three decades elapsed since the first genetic manipulation, is still in a stage of experimentation, learning how to turn its new tools and approaches into an operational, reliable, cost-effective technology, sufficiently "pluggable” with other technologies. Therefore employment directly related to biotech is particularly visible and identifiable in firms focused on R&D. Outside this core of R&D activity other industries appear as early adopters of biotech, but only parts of their activities relate to modern biotechnology. From the outside it is difficult to isolate what share of their employment is attributable to their activities within biotechnology.
In pursuit of clarity on the role of biotechnology this report studies a segment of Drug Discovery Firms (DDFs), which almost exclusively are based on capabilities in biotech research. This delimitation gives the advantage of studying a homogenous segment of firms. At the same time, this segment of biotech research firms is an informative indicator of the ability of the Danish economy to perform in the transition towards knowledge and sciencebased competitiveness. That is so because DDFs to an unusual extent depend on the ability of their framework to perform as an innovation system, by which we refer to advantages growing out of interactions and complementarities between e.g. universities, firms and venture capital. That makes DDFs a sensitive "seismograph" for the ability of the Danish innovation system to foster new science-based technologies.
Key words: Employment, Biotechnology, Firm size distribution, Industry structure,
Firm performance
JEL Codes: J21, L11, L22, L25, L65, O57